In his first interview with a Western press since the Jan. 16 In Amenas hostage siege, Yousfi recently told Time magazine Algiers had failed to foresee such an attack. He said: "It is a tremendous shock to us. We did not think that this massive attack, with such a large number of terrorists so heavily armed, was a possibility". He admitted:"Yes, we did not predict this".

Given the tragic result, the over-sight in intelligence had profound effects on this country, especially as Algeria's government had for years staked its reputation on stopping AQIM operatives from wagingattacks on its territory. At least 38 foreigners were killed in the attack, in a death toll of 70 which caused huge global concern about this perilous part of the world. Aside from the few dead Americans, five British workers died, as well as 10 Japanese, five Norwegians andeight Filipinos.

In interviews by Time with three counter-terrorism experts in Algiers over the past three weeks, the attack was described as involving considerable planning well in advance, raising even more questions about the lapse in Algerian intelligence. The sprawling gas plant, nearthe Libyan border and 40 km from the town of In Amenas, was the onlyone in Algeria where armed militia groups had launched several attacks against Western interests in previous months.

Yousfi said since Algeria had fought a brutal civil war through the 1990s against Islamist militants, officials believed the country's security forces were adequately prepared for an attack. He added: "We have experience during the 1990s, when we had terrorists [who] attacked some parts of our facilities, and pipelines. We considered that the measures we had taken were enough to dissuade these people from attacking us". The attack was calamitous, and in truth, preventing it might have been almost impossible.

The Jan. 16 assault was the biggest ever to occur on any energy facility in the world. The plant, jointly operated by BP, Statoil and Sonatrach, has produced 9 BCM/year of natural gas. The final death toll reflected the huge global interests in Algeria a country surrounded by violent turmoil in Mali to the south and Libya and Tunisia to the east. Many of the hostages died when Algerian special forces stormed the plant in a blaze of gun-fire, determined to end the siege before the assailants had a chance to blow up the gas facility.

The swift and brutal military reaction brought a furious response at the time from the White House, as well as the British and Japanesegovernments, none of which had been informed ahead by the Algerians.Yet Yousfi said Algerian special forces had saved many lives in the bloody strike on Jan 18. On the second day of the siege, Yousfi said,assailants became more intent on finding engineers capable of re-starting the plant. They believed that was a prelude to blowing it up. The explosion would have set off a giant fire-ball, likely to kill hundreds of people trapped inside the larger complex. Yousfi said there appeared to be three major aims of the attack: To kill as many foreigners as possible, to blow up the facility, and finally to flee Algeria with what-ever foreign workers were left alive.

The plant had been shut down and its equipment de-pressurised during the first minutes of the attack. That was thanks to the quick thinking of one lone Algerian worker, Muhammad Lamine Lahmar, who spottedthe gunmen moving in, and pressed the specific alarm signalling thatthe plant was under attack. Yousfi said: "This allowed everyone to understand immediately that this was a terrorist attack. They shut down the plant and made all the equipment de-pressurised". Lahmar, who was killed moments after pressing the alarm, has since become a hero among Algerians, and Yousfi told Time that the complex would soon be re-named in his honour.

Yousfi told Time: "We have called all our security services to review the security around these sites, everywhere in the country. Very tough measures will be taken, some of them immediately and others we are in the process of doing". He added: "our security services and military people are going to participate very actively in this securityof our sites everywhere, in the north, in the south, everywhere, notonly on the borders". He said the new measures would be implemented "within one or two weeks, maximum".

Geoff Porter, CEO of North Africa Risk Consulting in New York specialising in energy security, said: "The biggest concern is that this would inspire copy-cat incidents on a smaller scale". Still, he said IOCs in no way blamed Algeria for the attack, believing it was the result of a tragic set of circumstances involving the deep turmoil in neighbouring countries. Porter after the Jan. 16-19 drama held a round-table discussion in Houston about the Algerian attack, with executives from BP, ExxonMobil, Shell and three other IOCs, all involved in the country or weighing new projects there. Porter said: "The feeling was that something on this scale was not likely to be repeated. The trouble is, the international oil companies do not need something on this scale to be scared. They just need the possibility of one of their employees being killed to be scared".

In his interview with Time, Yousfi said Algerian officials plannedtheir own discussions with IOCs to examine tighter security and to co-ordinate their plans. But he ruled out one possibility: allowing IOCs to add their own private armed security at the sites. He said: "This is a question of sovereignty, no sovereign country would allow that. It might be more dangerous for everyone when they know that there are foreigners with arms, they might be targets".

With more military and security forces on site, Yousfi said, Algeria should be able to re-assure companies about operating there. He added: "We want them to be comfortable working in this country, and to feel safe".

Yousfi says Algeria has as much as 1,000 TCF of un-tapped shale and tight gas reserves. He says these will need "huge investments" in upstream infrastructure and transportation before they can meet increasing market demands. He adds: "Sonatrach has no experience in this industry. We need partners that have experience in shale gas and tight gas production... [They need] stability and vision for the long term... Natural gas has to play an increasing role in satisfying world energy".

Abdelhamid Zerguine: The CEO of Sonatrach since December 2001, Zerguine was previously president of TransMed's Samco, a Sonatrach/ENI affiliate based in Lugano, Switzerland, whose task was to raise Algeria's share of the gas market in Europe. He is the fourth head of Sonatrach in two years, having succeeded Nordine Charouati who had been inthe post for only 18 months. Cherouati had taken over from the disgraced Muhammad Meziane, who was sacked and later jailed amid a corruption and embezzlement scandal at the company. Zerguine joined Sonatrach in the 1970s and was once an adviser to TransMed.

Sonatrach has since 2010 witnessed a bottlenecking of deals and a lack of high-level decision-making unique in its history. Getting even simple permits and procurement forms signed since 2010 at Africa's largest company has been a struggle. About $13bn worth of projects are on hold. They include an Arzew ethane cracker, Arzew and Skikda LNGplants, etc.



Copyright 2013 Gale Group, Inc. All Rights Reserved. IAC (SM) Newsletter Database (TM). Copyright 2013 Arab Press Service.

(Originally  published Feb. 18, 2013, in APS Review Downstream Trends.)